© INTERNATIONAL COUNCIL ON CLEAN TRANSPORTATION
POLICY UPDATE
MARCH 2014
CHINA PHASE 4 PASSENGER CAR FUEL
CONSUMPTION STANDARD PROPOSAL
ICCT POLICY UPDATES
SUMMARIZE
REGULATORY
AND OTHER
DEVELOPMENTS
RELATED TO CLEAN
TRANSPORTATION
WORLDWIDE.
On January 21, 2014, the Chinese Ministry of Industry and Information Technology
(MIIT) released a proposed fuel consumption standard for passenger cars. The so-called
Phase 4 standard, which would regulate domestically manufactured and imported new
passenger cars sold in China from 2016 to 2020, echoes China’s Energy-Saving and New
Energy Vehicle Industry Development Strategic Plan of 2012–2020. It projects an overall
fleet-average fuel consumption of 5L/100km for new passenger cars in 2020, as measured
over the New European Driving Cycle (NEDC), if all manufacturers meet the weight-based
corporate-average targets defined in the regulation. Based on ICCT’s internal estimates, the
proposed standard would reduce oil consumption by approximately 348 million barrels and
reduce tank-to-wheel carbon dioxide emissions by about 149 million metric tons in 20301.
This policy update summarizes the major aspects and provisions of the proposed regulation and compares it to the global context.
STRINGENCY
Under the proposed rule, average fuel consumption of new passenger cars would fall to 5
L/100km in 2020, as measured over the NEDC, from an expected fleet average of 6.9L/100km
in 2015. This is an overall reduction of about 28%, or 6.2% annually, between 2015 and 20202.
The regulation is expected to contain a variety of compliance flexibilities and credits that will
likely reduce the overall stringency of the program, as explained in the next section.
The proposed Phase 4 regulation includes both vehicle-maximum fuel consumption limits
and a corporate-average fuel consumption (CAFC) standard for each manufacturer based
on vehicle curb weight distribution across the manufacturer’s fleet. Manufacturers and
importers must meet both standards; that is, for each model year, each vehicle produced
must meet its own weight-based maximum fuel consumption limit, and each manufacturer’s passenger car fleet must meet its corporate-average fuel consumption target.
The numerical targets for the vehicle maximums are identical to the current Phase 3 standard. The first two columns in Table 1 show the maximum fuel consumption limits for regular
1 The fuel saving and CO2 reduction estimates are made using ICCT’s global transportation roadmap model. For
more information on the model see http://www.theicct.org/global-transportation-roadmap-model.
2 According to official compliance data, actual fleet fuel consumption rate in 2012 is about 7.3 L/100km, therefore
the actual ambition of annual progress between the current baseline (2012) and 2020 is about 4.6%.
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ICCT POLICY UPDATE
cars and certain special-feature cars (those with non-manual transmissions or with three
or more rows of seats). The Phase 4 CAFC proposal is based on the same 16 vehicle curbweight classes defined in the Phase 3 standard. The numerical target for each bin is lowered
between 25% and 37% from Phase 3, with greater reductions for the heavier weight bins.
The CAFC standard also sets separate targets for regular vehicles and two types of
special-feature vehicles, which in this case are defined as: vehicles of curb mass less than or
equal to 1,090 kilograms with three or more rows of seats; all other vehicles with three or
more rows of seats. The first specialty car type mainly refers to a type of mini-sized cargo
van unique to China that is usually built on a mini-car platform. The market for these vehicles
is mainly lower-income individual consumers or small-business owners in suburban or rural
areas. The second refers to small vans, large SUVs and multi-purpose cross-style vehicles
generally. Fuel consumption targets for each curb mass bin for the two special-feature
vehicle types are 5% and 3% higher, respectively, than those for regular cars. The last three
columns of Table 1 show the Phase 4 CAFC standard targets for all three types of vehicles.
Table 1. Numerical targets of proposed Phase 4 regulation
Curb Mass Bin
kg
Maximum Limit (L/100km)
CAFC Target (L/100km)
Cars ≥3 Rows
Reg. Cars
Spec. Cars
Reg. Cars
Minivans
0<CM≤750
5.2
5.6
3.9
4.1
750<CM≤865
5.5
5.9
4.1
4.3
865<CM≤980
5.8
6.2
4.3
4.5
980<CM≤1090
6.1
6.5
4.5
4.7
1090<CM≤1205
6.5
6.8
4.7
1205<CM≤1320
6.9
7.2
4.9
5
1320<CM≤1430
7.3
7.6
5.1
5.3
1430<CM≤1540
7.7
8
5.3
5.5
1540<CM≤1660
8.1
8.4
5.5
5.7
1660<CM≤1770
8.5
8.8
5.7
1770<CM≤1880
8.9
9.2
5.9
1880<CM≤2000
9.3
9.6
6.2
6.4
2000<CM≤2110
9.7
10.1
6.4
6.6
Same as
Minivans
4.8
Same as Reg.
5.9
6.1
2110<CM≤2280
10.1
10.6
6.6
6.8
2280<CM≤2510
10.8
11.2
7
7.2
2510<CM
11.5
11.9
7.3
7.5
SCENARIOS
Actual fleet-average fuel consumption performance in 2020 will depend on China’s sales mix
of vehicles, and average vehicle weight, in that year. To provide a preliminary evaluation, the
ICCT extrapolated from 2010 new passenger car market data to estimate fleet average fuel
consumption for 2020. Regular cars, as defined for the Phase 4 CAFC standard, were the
mainstream vehicles, representing over 80% of annual passenger car sales in 2010. Minivans
and other cars with three or more rows of seats represented 13% and 6% of the annual sales,
respectively. Fleet average vehicle weight was about 1,290 kg in 2010. Assuming the market
structure and average vehicle weight remains the same until 2020, the new passenger car
fleet fuel consumption would decline to 5L/100km under the proposed regulation.
2
CHINA PHASE 4 PASSENGER CAR FUEL CONSUMPTION STANDARD PROPOSAL
However, the average curb weight of Chinese passenger car fleet has risen steadily, from
1,253 kg in 2010 to 1,317 kg in 2013. Recognizing this trend, MIIT stepped up the reference
fleet weight bin (i.e., the bin in which the fleet-average curb weight is expected to fall) for
developing the 2020 standard curve from 1,205~1,320 kg to 1,320~1,430 kg. Assuming the
actual fleet-average curb weight is around the midpoint of the new reference bin, at 1,375 kg
(representing an average 6% increase from the 2010 level), and the relevant market shares
of regular cars, minivans and other vehicles with no less than three rows of seats remain at
the 2010 levels, the new passenger car fleet fuel consumption would then fall to 5.1L/100km.
The above scenarios do not reflect the flexibilities in the regulation, which are discussed below.
PROGRESS FROM PREVIOUS REGULATIONS
The proposed Phase 4 standard remains similar in structure to China’s three previous
standards. The fleet is divided into 16 curb weight bins, and each bin is assigned a fuel
consumption target. Bin steps are distributed quite evenly across the majority of vehicle
weights, with relatively wider spreads for the heavier vehicle weight bins. The target for
each bin has tightened over time, as illustrated in Figure 1. Note that the first two phases
of fuel consumption standards were per-vehicle maximum fuel consumption limits, while
starting with Phase 3 China began to adopt corporate-average standards. Therefore,
when evaluating progress in the stringency of these standards, it is fair to compare the
proposed Phase 4 CAFC standard to the Phase 3 CAFC standard.
18
16
Phase 1 Max
Standard (NEDC l/100km)
14
Phase 2 Max
12
Phase 3 CAFC /
Phase 4 Max
10
8
Phase 4 CAFC
6
4
2
0
500
750
1000
1250
1500
1750
2000
2250
2500
2750
Curb weight (kg)
Ph. 1 Manual
Ph. 1 Auto
Ph. 2 Manual
Ph. 2 Auto
Ph. 3 Spec.
Ph. 4 Reg
Ph. 4 Minivan
Ph. 4 3-Row
Ph. 3 Reg
Figure 1. Illustration of past, current, and proposed fuel consumption standards for new passenger
cars in China
3
ICCT POLICY UPDATE
The proposed Phase 4 standard has several improvements over the Phase 3 standard.
First, the overall slope of a linear curve through the midpoint of each step is flatter for
the Phase 4 standard than for Phase 3. This means that the Phase 4 standard is tougher for heavier vehicles relative to the Phase 3 standard, which reduces the incentive
to increase vehicle weight. Figure 2 compares the slope (or derived slope) of weightbased passenger vehicle CO2 or efficiency standard curves adopted or proposed in
the European Union, Japan, China, South Korea, and Brazil. The curve derived from
the China Phase 4 proposal for regular cars (blue dotted line) is the second flattest
standard curve among the five. Second, although the Phase 4 standard still treats
regular and special vehicles differently, the gaps in fuel consumption requirements for
the various car types are smaller.
12
Brazil 2017
South Korea 2015
Standard (NEDC l/100km)[2]
10
Japan 2020
Korea 2011: 1421 kg
8
China 2020 Proposed
Brazil 2012: 1100 kg
6
EU 2021
4
Japan 2011:
1193 kg
2
China 2012:
1296 kg
EU 2012:
1400 kg
Dots: Fleet average curb weight[1]
0
500
750
1000
1250
1500
1750
2000
2250
2500
2750
Curb weight (kg)
[1] The definition of curb weight is commonly vehicle empty weight with standard equipemnt, except
that EU requires to plus 75kg occupant and luggage weight. The requirements for standard equipment
and oil tank load are varied slightly from country to country.
[2] Gasoline in Brazil contains 22% of ethanol (E22), all data in the chart have been converted to
gasoline (E00) equivalent
Figure 2. Vehicle weight-based passenger car vehicle GHG or efficiency standards, fleet-average
vehicle curb mass across regions, and comparison of standard slope
CREDITS AND FLEXIBILITIES
The proposed Phase 4 standard provides three types of credits: for new-energy vehicles
(battery-electric, fuel cell and plug-in hybrids); for other ultra-low fuel consumption
vehicles, i.e., those with fuel consumption less than or equal to 2.8L/100km on the
combined urban and extra-urban cycle; and for vehicles equipped with innovative
technologies leading to real-world fuel saving (so-called off-cycle technology credits).
The standard will phase in gradually.
New energy vehicles are counted as multiple vehicles towards manufacturers’ CAFC
calculation for compliance. The multiplier is set at 5 in 2016–2017, falling to 3 in
2018–2019, and then to 2 in 2020. For the CAFC calculation, the energy consumption of
battery-electric vehicles, the electric-drive part of plug-in hybrid vehicles and fuel cell
vehicles are counted as zero. An alternative possible accounting for pure electric and the
4
CHINA PHASE 4 PASSENGER CAR FUEL CONSUMPTION STANDARD PROPOSAL
electric portion of PHEVs would be to use converted gasoline-equivalent fuel economy
with an equation developed from a separate regulatory proposal (Fuel Economy Evaluation Method for Electric-drive Vehicles, January 2013). This would be further clarified in
the Corporate-Average Fuel Consumption Accounting Method for Phase 4 standard to
be released later.
Other ultra-low fuel consumption vehicles with combined fuel consumption no more than
2.8L/100km will be counted as 3 vehicles in 2016–2017, 2.5 in 2018–2019, and 1.5 in 2020.
Off-cycle technology credits. The proposed Phase 4 standard offers compliance credits
to manufacturers that install innovative technologies with justifiable real-world fuel saving
on their vehicles. Currently the regulatory agency is considering four types of technologies
eligible for the credits: tire pressure monitoring system; high-efficiency air-conditioning
system; start-stop system; and transmission gear shift reminder. Manufacturers that install
one or more of these technologies with demonstrated fuel-saving are eligible for up to
0.5 L/100km credit towards their CAFC standard compliance. The details of the off-cycle
fuel-saving technology credits will be specified separately and issued at a later date.
Phase in. The proposed Phase 4 standard will phase in gradually, beginning in 2016.
Manufacturers are allowed to exceed their required 2020 CAFC targets by a certain
percentage between 2016 and 2019. Table 2 details the phase-in schedule.
Table 2. Phase-in schedule of proposed Phase 4 standard
Year
CAFC/CAFCT*
2016
132%
2017
124%
2018
116%
2019
108%
2020 and beyond
100%
*C
AFC=Actual corporate-average fuel consumption of a
manufacturer in a given year; CAFCT = Corporate-average
fuel consumption target of a manufacturer in 2020
Note that the percentages for the phase-in schedule are larger than the average annual
reduction required from 2015 to 2020. If manufacturers are allowed to bank credits
during the phase-in period, that in turn could allow them to meet a less stringent standard in 2020. The Phase 4 standard proposal did not specify whether a manufacturer
can bank compliance credits and carry over the credits to future years. However, the
Passenger Car Corporate-Average Fuel Consumption Accounting Method released in
March 2013 (to guide the Phase 3 standard CAFC implementation) allows manufacturers
to over-comply and carry forward the credits for future compliance for up to three years.
It is possible that this rule also applies to the Phase 4 standard implementation.
5
ICCT POLICY UPDATE
INTERNATIONAL COMPARISON
As shown in Figures 3 and 4, in absolute terms the proposed Phase 4 standard would put
China third, behind the EU and Japan, with respect to passenger car3 fuel consumption
and equivalent GHG emissions requirements during the 2016–2020 period4. However,
given the great differences in fleet mix, characteristics, and even baseline fuel economy
and technology adoption among the various regions, looking only at the absolute fleet
targets does not give the full picture of the regulatory stringency of the standards enacted
or proposed in these regions. The required annual fleet fuel consumption reduction rates
offer an alternative means to evaluate and compare standard stringency across regions.
Figure 5 illustrates the required rates of reduction in annual average fleet fuel consumption during the latest regulatory term (or regulatory proposal term) across regions. As
the figure shows, China’s proposed Phase 4 standard would require approximately 6.2%
annual reduction in fuel consumption of new passenger vehicles from 2015 to 2020.
10
Liters per 100 Kilometers (Gasoline Equivalent)
normalized to NEDC Test Cycle
9
8
7
Mexico 2016: 6.5
S. Korea 2015: 6.3
6
Brazil 2017[3]: 6.3
China 2020[1]: 5.0
5
US 2025[2]: 4.4
India: 4.8
Japan 2020: 4.5
4
Canada 2025: 4.4
EU 2021: 4.1
3
2
historical performance
enacted targets
1
proposed targets
or targets under study
0
2000
2005
2010
2015
2020
2025
[1] China’s target reflects gasoline vehicles only. The target may be higher after new energy vehicles are considered.
[2] The U.S. standards are fuel economy standards set by NHTSA, which is slightly different from GHG standards due to A/C credits.
[3] Gasoline in Brazil contains 22% of ethanol (E22), all data in the chart have been converted to gasoline (E00) equivalent
[4] Supporting data can be found at: http://www.theicct.org/info-tools/global-passenger-vehicle-standards.
Figure 3. Comparison of global passenger vehicle fuel consumption standards normalized to NEDC
L/100km
3 Note that regulations in the US, Mexico, and Canada set separate standards for new car and light truck fleets, as well
as targets for the combined light-duty vehicle fleet. The Chinese Phase 4 standard proposal (like all the previous
Chinese standards) only applies to passenger cars, including sedans, SUVs, multipurpose vehicles and cross-style
vehicles corresponding to M1 and M1G categories in the European vehicle classification system. In Figures 2 and 3, in
order to make apples-to-apples comparison of standards, we only show the car fleet standards in the each region.
4 The minor discrepancy between the U.S. GHG standards and fuel efficiency standards shown in Figure 2 and 3
is due to the exclusion of credits for using A/C refrigerants with lower global warming potential from the fuel
efficiency standards.
6
CHINA PHASE 4 PASSENGER CAR FUEL CONSUMPTION STANDARD PROPOSAL
Grams of CO2 per kilometer normalized to NEDC test cycle
240
220
200
180
160
Mexico 2016: 153
Brazil 2017[3]: 146
S. Korea 2015: 153
140
China 2020[1]: 117
120
India: 113
100
Japan 2020: 105
US 2025[2]: 93
EU 2021: 95
Canada 2025: 93
80
60
historical performance
40
enacted targets
20
proposed targets
or targets under study
0
2000
2005
2010
2015
2020
2025
[1] China's target reflects gasoline vehicles only. The target may be higher after new energy vehicles are considered.
[2] US standards GHG standards set by EPA, which is slightly different from fuel economy standards due to low-GWP refrigerant credits.
[3] Gasoline in Brazil contains 22% of ethanol (E22), all data in the chart have been converted to gasoline (E00) equivalent
[4] Supporting data can be found at: http://www.theicct.org/info-tools/global-passenger-vehicle-standards.
Figure 4. Comparison of global passenger vehicle GHG emissions standards normalized to
NEDC gCO2/km
40%
US Car
2017-2025
Canada LDV
2017-2025
EU Car
2015-2020
Japan Car
2015-2020
China Car
2015-2020
S. Korea car
2011-2015
30%
Mexico LDV
2011-2016
Proposed
Enacted
25%
20%
15%
10%
5%
35%
34%
27%
16%
27%
5%
13%
13%
0.0%
0%
1.0%
5.3%
5.1%
6.1%
3.5%
6.2%
1.4%
2.8%
2.0%
2.8%
3.0%
4.0%
5.0%
Proposed
Enacted
Figure 5. Comparison of overall and annual average fleet fuel consumption reduction rates under
proposed or enacted standards across regions
7
6.0%
7.0%
Annual Reduction
Overall Reduction
35%
India car
2016-2021
ICCT POLICY UPDATE
REMAINING ISSUES
The proposed standard does not specify any enforcement mechanism. In fact, the
current (Phase 3) standard, the first-ever corporate-average type of standard in China,
has been phased in over two years without a solid enforcement plan. In addition, as
indicated above, detailed provisions concerning off-cycle fuel-saving technology credits
are missing from this proposal, promised at a later date.
8